Suppose the government has a 1.2 trillion budget deficit. If the ...

[Kthamas]

Suppose the government has a 1.2 trillion budget deficit. If the government borrows 1.2 trillion to finance this deficit and finances the rest by printing money, the amount of new money created will be
 
  A) 0. B) 600 billion. C) 1.2 trillion. D) 2.4 trillion.

Question 2

Refer to the scenario above. Plutoland's current account would show a balance of ________.
 
  A) 14 billion B) -6 billion C) -10 billion D) 4 billion

[dellikani2015]

Answer to Question 1

A

Answer to Question 2

C